Research On The Impact Of Overconfidence On The Vaccine Supply Chain Under Uncertain Supply And Demand

In real life,people may not be completely rational in their decisions when they are influenced by experience.Overconfidence in information is one of the reasons why individuals are biased in decision making.Before the flu season,in the supply chain of vaccine,consumers will face to estimate their negative effects caused by the flu;under the supply uncertainty and demand uncertainty,manufacturers need to estimate the productivity of the vaccine.Therefore,how to deal with the uncertainty of upstream and downstream of the supply chain is a new research subject in the case of overconfidence.Based on the theories of overconfidence,and the uncertainty of supply and demand in the real supply chain,our model will consider three different decision makers: consumers,manufacturers and government.The consumers consider their utility maximization,the manufacturers consider their profit maximization,and the government considers the maximization of the total social welfare.In other words,based on the theories of overconfidence,this paper studies the optimal decision-making problems of three decision-makers in the case of uncertain demand and supply.Through the analysis of the model,it is concluded that the optimal solution of the three problems,analyzes the coefficient of overconfidence influence on decisions that,at the same time analyzed impact of the government intervene the demand or supply side through a certain way.This study shows that under the theory of overconfidence and the uncertainty of supply and demand,the three decision-makers still have the optimal solutions.First of all,when the infection disutility of the marginal individual in equilibrium is greater than the average,the overconfident of consumers will cause the reduced demand,at the same time;manufacturers will choose to reduce production to avoid waste.The government’s optimal input will also be reduced,but consumers’ overconfidence will have a little impact on manufacturers.Second,the overconfidence of the manufacturers alone can still lead to the optimal decision to maximize their profit,and the manufactures expected profit is related to the degree of overconfidence.Finally,when consumers and manufacturers are overconfident,manufacturer and government can still get the best decisions.Although in either case,the government cannot achieve the optimal decision of the society by intervening in demand or supply side,but through government intervention can make the whole social welfare was optimized.